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proceeding. The property was needed to widen and improve Route
355 in Gaithersburg, Maryland. In Wilson I, we held that of the
$62,937 condemnation award received by petitioners, $34,618 is
allocable to prejudgment interest. Furthermore, petitioners
conceded that $1,333 of the $62,937 is taxable as postjudgment
interest income.
In 1989, petitioners paid $26,341 for attorney's fees
incurred in connection with the condemnation proceedings.
Petitioners did not claim the expenses on their 1989 return,
since they believed the fees were not deductible because they
were attributable to a condemnation award eligible for
nonrecognition of gain pursuant to section 1033.
Respondent determined in the notice of deficiency for 1989
that petitioners had unreported dividend income of $1,677.
However, on brief, respondent conceded that for 1989 petitioners
had unreported dividend income of only $573. In Wilson I, we
found that for 1989, petitioners received a $2,105 dividend
distribution from the T. Rowe Price stock fund (stock fund),
which they failed to report on their 1989 income tax return.
In 1989, petitioners received $27,206 on the sale of the
stock fund. Petitioners did not report the sale on their 1989
tax return. Respondent determined in the notice of deficiency
for 1989 that petitioners had a $29,904 unreported capital gain.
However, the notice of deficiency failed to give petitioners
credit for their basis in the stock fund. On brief, respondent
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